Start with the real cost, which is meaningfully higher than the salary. Employer payroll taxes, workers compensation, and unemployment insurance sit on top of what you agreed to pay, and they begin with the first employee rather than at some later size. Add the tools that person needs, which are frequently priced per user, and any equipment. The total is commonly a quarter to a third above the headline figure, and businesses that budget only for the salary have budgeted for roughly three quarters of the commitment.
Then check the work rather than the revenue. Hiring is affordable when there is a sustained pattern of work you are turning away or delivering badly, not when one month was strong. The test worth applying is whether you have been consistently over capacity for a full quarter. A single busy period is seasonality or a large project, and hiring against it leaves you with a fixed cost and a returning quiet month.
Look at your runway before committing, using the cash view rather than the profit view. A hire is an ongoing outflow that starts immediately and produces a return slowly, since somebody new takes weeks to become productive even with good documentation. The reasonable position is being able to cover the full cost for six months from cash you can see, without assuming revenue that has not been contracted.
Consider the alternatives honestly first, because they are frequently better at this stage. A contractor for a defined piece of work carries no ongoing obligation. Part time hours cost proportionally less and are easier to extend than to reverse. And removing work through better process or a tool sometimes eliminates the need entirely, which is worth checking before committing to a person.
The signal that you have waited too long is recognisable. You are declining work you could deliver, quality is slipping on what you accept, and the parts of the business only you can do are the parts being neglected. At that point the cost of not hiring exceeds the cost of hiring, and the risk has inverted.
Plan for the period before productivity as part of the cost. Somebody new is not delivering at full rate for the first month or two even with good documentation, and the business absorbs that gap while paying in full. Budgeting as though the return begins on day one is how a hire that was affordable on paper becomes uncomfortable in practice.